Tag Archive | "Latin America"

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Plotting Out North America’s Shale Boom

Posted on 13 February 2012 by Tea Server

Two weeks ago Wikistrat launched a simulation on North America’s energy bonanza. In case you’re wondering, Wikistrat is a firm that relies on a six-continent wide arsenal of analysts to stake out geostrategic scenarios, and the scope of its simulations are equally broad, at least at the start. For example:

What if current estimates of shale reserves prove overblown? In such a case Canada and the United States would’ve risked environment degradation of hundreds of communities, energy companies would’ve sunk billions of dollars into useless infrastructure, and years of scientific research into hydrocarbon fuel alternatives might be lost.

On the other extreme, shale might be the second coming of what Daniel Yergin once dubbed “Hydrocarbon Man.” Might large shale reserves in Latin America—especially Mexico, Argentina, Bolivia and Paraguay—touch off a not-so-friendly competition between the United States and China? Transport logistics give the US an overwhelming advantage in cooperation with Latin America’s gas firms, and China has its own trove of shale, so the potential for a great power struggle over shale in far-flung parts of South America may be deceptively low—for now.

Wikistrat’s gadflies are hashing out these two questions, along with roughly a dozen more scenarios regarding the future of shale. Stay tuned.

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BRICS and Investment: Emerging Markets and Frontier Markets Going for Gold

Posted on 10 February 2012 by Tea Server

Brazil has been affected in recent weeks by suggestions of a slow down in Brazil’s usually hot economy. Inflation in China also has received some attention. The result was that some market studies have been done on the BRICS and emerging economies showing that countries like Mexico, South Africa and Vietnam are doing quite well and that China keeps on moving along to attract investment, even with signs of inflationary pressures. In a Bloomberg article on the top emerging markets, China was the only one of the BRICS to make the medal round, with Thailand and Chile taking the silver and bronze positions. Frontier markets, those who are not BRICS or possible future BRICS but had noticeable growth, also made their own listing with Vietnam at the top of the list. South Africa and Mexico made the top ten of emerging markets, South Africa already being seen as one of the BRICS and Mexico achieving record reserves despite slow growth in the US and local narcotics violence.

This year Mexico will elect a new President and Senate and the parties are slowly presenting their candidates for the upcoming six-year Presidential term. President Calderon has served his one and only legislated term in office of six years and it will remain to be seen whether his PAN party will be re-elected. With excellent economic numbers in a slow global economy, the PAN has a good chance of being re-elected. What might hurt the party is the open drug war in Mexico currently taking place that was a result of Mr. Calderon pressing for drug security in Mexico and the entrenched drug networks that have been established in Mexico over the last few decades. With former PAN President Vicente Fox pushing for a legalisation of the narcotics trade to reduce violence in Mexico, the PAN may have some soul searching to do before putting the Presidential campaign into full force.

A decent market measure for all economies can often been seen in the aviation industries response to different national economies. In Mexico, the now defunct Mexicana Airlines is showing some signs of re-emerging in Mexico after its financial collapse a few years ago. Emerging markets in general has seen some attention from the aviation industry in general as many companies seek customers in Asia, Latin America and the Middle East, a result of region market growth in general through to 2016. While the aviation industry is not being displaced in North America and Europe, it does show that BRICS and other emerging and frontier markets will produce trade expansion while the US and eventually the EU drag themselves out of economic paralysis. A conference on competitiveness and innovation addressing the aviation industry by GE named “GE American Competitiveness: What Works” will deal with issues of expansion to emerging markets and strategies in the current US market slowdown next week in Washington DC. Anyone who wishes to see how one industry is handling expansion to emerging markets and growth in the time of economic slowdown should seek information from the conference presenters and organizers. With the possible re-birth of Mexicana and troubles in Asia with the A380, it is certain to be an interesting week of presentations. Information on the conference can be found here.

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The Taliban are not nationalists

Posted on 02 February 2012 by Tea Server

There is a conventional wisdom out there — parroted often by the likes of Imran Khan — that the Taliban and their local affiliates act the way they do because they are solely and exclusively motivated by the presence of foreign troops in Afghanistan, as well as Pakistan’s alliance with the U.S.

By this logic, the Taliban are a nationalist force, standing up for their nation, which is alternatively considered the Pashtun nation or the Afghan state, depending on one’s own beliefs and opinions on the boundaries of their political identity.

With that as background, here’s an excerpt from a piece by Ijaz Khan in the Friday Times:

Nationalist movements promote and protect national language, culture and identity through political expression. They aim to control their affairs without outside interference. They are about managing their economic resources by themselves. They may want autonomy within a multinational state in order to structure it to protect their identity, or in certain cases for an independent state of their own.

Taliban meet none of these criteria in Afghanistan or Pakistan, and therefore cannot be considered a Pashtun nationalist movement. They take ideological and political inspiration from Arabs and other non-Pashtuns. They have consciously, as a matter of policy, targeted different cultural traits of Pashtuns, like tribal councils and folk music; they are not concerned about the language and promote mostly Arabic and/or interestingly, Urdu; Economic resources or their control is not their concern; neither is any political or administrative manifestation of Pashtun identity their goal.

They have killed a large number of traditional Pashtun elders in FATA and banned the Jirga as means of dispute settlement in areas under their influence. They have been eliminating the Pashtun way of life.

Isn’t it instructive that scholars who actually know the area, such as Ijaz Khan (University of Peshawar) or the oft-cited Farhat Taj, completely and unequivocally reject the Imran Khan thesis? This idea that the Taliban are somehow representative of the Pashtun nation, and are fighting and dying for them, is just silly.

Within the study of civil war in political science, non-state movements are generally divided between ethnically focused and ideologically focused. Obviously this is often a too-rigid categorization, but it’s useful because the two types of mobilizations often have different goals.

Those movements that are ethnically motivated are generally what we call nationalist movements. These tend to be focused heavily on a particular piece of territory, since group identity and territory have a very strong relationship. So if all xs are concentrated in region X, then it’s unlikely that the xs will launch a movement, violent or otherwise, in regions other than X. This is because (a) they don’t care about regions other than X; in fact, their mobilizations are often motivated by demanding increasing separation from X and non-X areas, and (b) there’s not enough xs in the non-X region for them to congeal in a movement worth worrying about. Examples include the Tamils in northern Sri Lanka or the Bengalis in former East Pakistan.

Those that are ideologically motivated tend to be focused on control of the state or political unit at large. They are not interested in controlling a sliver of territory, they are interested in re-orienting the state. The important thing to note is that granting a piece of territory to the agents of the movement is unlikely to satisfy them, since their movement is not based on the control of territory in the first place. Examples include the Communist Party of China or the various right-wing militias operating in Latin America during the Cold War.

This distinction matters because it gets at the heart of the debate on the war in Pakistan and whether it is worth fighting. If you believe that the Taliban and their local affiliates are nationalists, then it makes sense to give them control of various districts or maybe even a whole province, in the hope that that’s what they want, and will therefore cause them to stop mounting violent challenges to the state.

If you believe that the Taliban and their local affiliates are ideologues, then it doesn’t make sense to give them control of various districts because they will only use that control to consolidate their material capabilities to launch yet further assaults on the state and its citizens.

I wish we lived in a world where the Taliban were indeed nationalists because it would mean that there is fairly self-evident solution to the violence. Unfortunately we do not and there is not. Imran Khan, however, continues to believe that they are and that there is. Reasonable people can disagree on the extent to which force should be used, what type of force (air power vs shock troops vs full-blown incisions) is to be used, how negotiations should be constructed, which actors should be invited to the negotiations, and so on. But no reasonable person can believe that the “war can be ended in 90 days” or that the Taliban are likely to go quietly into the sunset if you hand over a bunch of territory to them.



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Consumer Protection in the Telecommunications Market: Carlos Slim Answers Back to the OECD

Posted on 02 February 2012 by Tea Server

Carlos Slim is well known in Latin America and abroad as one of, if not the wealthiest CEO in the world. He was even mentioned on the Colbert Report this past week introducing him to the American public as someone who’s net worth trumps that of Mitt Romney as well as that of Donald Trump. This week an OECD report named Slim’s company, Telmex as overcharging Mexican consumers for telecommunications products from 2005 to 2009. Slim argued against the allegations and the numbers presented in the OECD report stating that his company was working within the competitive market that exists in Mexico and did not take any actions that would be deemed as anti-competitive. It is likely a detailed debate will occur over Slim and his companies that may lead to a test of Mexico’s competition laws as well as the reputation of Mexico’s state telecom giant Telmex. We will have to wait and see if Slim wins the day, or if he will be fined. One fine has already been set on Slim’s company, but a challenge in Mexico’s Supreme Court may eliminate this legal measure from being enforced.

Telecommunications giants have been in the position to create a great deal of wealth as new technologies create new boom markets for their products in a commercial environment dependent on new forms of telecommunications. With technology, come many new IP laws to enforce violations of privacy and competition in those new markets as companies jostle for position and form legacies like Nokia and Microsoft. In the EU, stringent laws enforcing consumer protection within the Common Market have set much of the global standard against overly ambitious telecoms giants. Going from competition laws setting records against companies like Microsoft to investigations into companies like France Telecom regarding a series of employee suicides since privatisation a few years ago, the EU has set the hard standard against companies that wish to violate competition laws and as well as all other market and labour standards. It is likely that Mexican competition laws will take much of their precedents from that of the EU and US to enforce any violations against Carlos Slim’s business interests, if evidence provides for enforcement to become necessary.

In reality Mexico is likely not the most expensive country for phone services, and there is a great deal of evidence showing that their NAFTA neighbour, Canada has the highest per-capita telecoms charges in the world. A lack of effective competition policies have created a market in Canada where people not only pay a great deal for services, but services are often out of date and ineffective due to a lack of competition in the Canadian mobile phone market. While many developing nations have modern up to date cellular services due to the reduced cost of setting up such systems in places that historically had poor phone access, Canada’s modern economy creates an expensive and outdated mobile phone market that has existed without proper scrutiny from the last few governments. There have been some moves to protect Canadian consumers over the last few years, but until a true measure to help Canadian consumers takes shape it would be a good idea for those like Carlos Slim and other telecoms to enter a Canadian market that sorely needs proper services in their sector for individuals and businesses. A study of the Canadian, European and Mexican telecoms markets would be a useful and interesting study to provide all consumers with a legitimate and fair market for telecoms usage.

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America – A Constitutional Midwife for the Arab World!

Posted on 02 February 2012 by Tea Server

A recent article by Nathan Brown in the FP (Americans, put away your quills), argues very eloquently against the advocacy and promotion of ‘American constitutional ideas’ (and ideals) in Arab countries currently in transition due to the Arab Spring.  Although the history of U.S. constitutional transplantation is mixed at best (failed in Latin America in the eighteen hundreds, was somewhat more successful in Germany-Japan-Italy after WWII, remains to be seen what happens in Iraq), I respectfully disagree with Mr. Brown’s assertion that “much of our advice will be bad and most will be irrelevant.”

The Middle East – North Africa (MENA) region represents that last remaining undemocratic region of the world.  No other region has the highest concentration of authoritarian regimes and absolute monarchies.  Although the U.S. has a lot of baggage on its side, especially when it comes to its foreign policy during the past 60 years, the one thing that America can still brag about is its system of governance.  The one thing that the U.S. can still educate the rest of the world is governance!  [Do as I say, not as I do!]

Mr. Brown is right in pointing out that the U.S. constitutional experience is very idiosyncratic.  On the other hand, I would venture to say that the U.S. system of governance is what has contributed immensely to the longevity of the republic and the overall success of the American economy.

For comparison, consider Greece (my home-country, with a population of similar temperament but only slightly better luck then the Arab people) and its current sovereign debt crisis.  The true reason of Greece’s economic misfortunes (the high government spending and low tax collection) is DUE TO (what I like to call) the dictatorship of the Prime-minister.  For the majority of the past 30 years, the office of the Prime-minister exercised complete control over the Greek government – no checks and balances, no divided government between different parties, just a Westminster model tailored to the ‘idiosyncratic needs’ of the Greek society where the prevailing political philosophy/ideology demands a strong executive branch with enhanced legislative powers in order to ‘swiftly pass vital reforms.’  Greece’s system of governance, in itself a foreign transplant that has now become part of the Greek political identity, is primarily responsible for the current state of overall disrepair.

The right form of governance for the right society has never been easy to identify.  A lot of times, societies have adopted forms of governance that were imposed to them by past colonial masters or short sighted revolutionary uprisings.  The MENA region, with its long set of constitutional traditions, is no different.

The prevailing parliamentary system of governance currently in effect in most North African countries, which Mr. Brown argues should be respected because of its long routes in the various societies and the familiarity of local actors (politicians, academics, judges) with it, is also a transplant of European origin.  Parliamentary democracy where the executive and the legislature come from the same body (united against ‘the crown’) is not indigenous to Egypt or Tunisia, let alone Jordan or Morocco (not to mention Libya!).

Instead of tweaking around the edges of the current political/constitutional systems (as Mr. Brown suggests), the people of the region might be better served if their opted for a whole new system of governance!

It is time to end the experiment with the Westminster model: of government being derived, depended and tethered of the legislative branch.  American federalism is hard to implement because it demands too much from both the people and politicians – constant participation on the part of the people (at multiple levels of government) and mature restrain on the part of politicians.  However, the world has changed since Latin American countries tried to implement U.S.-style federalism, and I believe young people are now better prepared to adopt a system of governance that demands much but can deliver even more!

Constitutional Suggestions for the ‘Arab Spring’

When federalism at the national level is applied properly it leads to multiple centres of power (and thus multiple leaders), not just one strongman (a president or a prime-minister with all the power).  What could be more appropriate for the people of North Africa and the Middle East, which have suffered so much at the hands of a few dictators, than to adopt a political system that does not deify one person or one family?  The U.S. federal system of governance provides an excellent starting point for any discussion about constitutional reform in the region.

The most fundamental tenet of the U.S. federal system of governance is the complete institutional separation of powers at the national level, while at the same time every decision at the national level requires the consent of all the branches of government.  Therefore, Legislative (Congress), Executive (President) and Judiciary (Supreme Court) branches are completely separate, but laws passed by the legislature need the approval of the President), and are subject to review by the Courts.

Second, the legislative process is performed by a bi-cameral legislature, where one chamber represents the people (House of Representatives) while the other (Senate) represents the sub-national units (States), and both chambers are equal in power and responsibility.  Furthermore, by staggering the terms of legislators (2 years for House members, 6 years for Senate members) and staggering the election of Senators (one third up for re-election every two years), the legislature is being renewed every two years while being insulated from dramatic swings in popular opinion.

Third, Cabinet and sub-Cabinet officials, Ambassadors, and Judges have to be considered and approved by the legislature.  This oversight role of Congress continues after Cabinet members are appointed, when they are required by law to appear in front of select legislative committees and report on their departments activities, answer questions, and make available to legislators any and all information’s that legislators deem relevant.

Finally, the independence of the judiciary branch is guaranteed through life-time appointments.  Although judges are selected by the President and approved by the legislature, they are appointed for life, and their removal is exceptional and very hard to achieve.  Furthermore, judges have the power to review the constitutionality of laws, and through the years have many times struck down laws which were not consistent with the letter or the spirit of the Constitution.

Add to these fundamental elements of the U.S. system, term limits for politician, clear provisions for amending the constitution and removing the President, an independent Electoral Commission, and an independent and competent Office for the protection of Human Rights, and you have a recipe for political stability and economic success.

The Right Form of Governance

The history of modern economic development is full of successes and failures.  The failures appear to be more than the successes; from the many African nations that have never truly improved their condition since independence 60 years ago, to the Middle East, rich with oil but stagnant economically and democratically.  Now, the nations of the Arab world are going through some major changes to their regimes and future systems of governance.  Identifying the right form of governance for the right society has never been easy, but federalism could be the most appropriate of all possible choices for the nations of the ‘Arab Spring’!

During the 19th century, the exportation of U.S.-style federalism was deemed detrimental to the political development of Latin America nations.  I believe the times have change, and U.S.-style federalism could serve as a future system of governance for the ‘Arab Spring’ nations.  Furthermore, by advocating for constitutional reforms that promote federalism and good governance, and by rewording those nations that truly adopt such changes, the U.S. can restore its role in the world stage as a champion of democratic principles.

We owe it to the world, whether they need our advice or not!

 

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The Illegitimate State of Israel

Posted on 30 January 2012 by Tea Server

Formation of Modern Day Israeli Illegitimate State
                                                              

          For centuries, the Jews have had their presence all over the world, but were mostly concentrated in North Africa, Arab states and in Europe (mostly Germany, Austria, and the UK), USA and some parts of Latin America (South America) ; but they didn’t have their own state with a Jewish majority and were desperate to have one they could call their own.

          Following the world wars, most of the Muslim Ottoman Empire was broken up and captured by allies that implemented their own rules in these territories.  After the 2nd world war ended, the Jewish population was mostly exiled from Europe and was sent to Palestinian territories to occupy and live there. All this happened under the British support. The British first kept the Jews in refugee camps as the Muslims were not ready to accept this. Later on, they were given armed support and were set free to occupy by force. Seeing the gradually weakening British control on Palestine, the Jewish militant and terrorist groups started a revolt against the British Rule in a desperate attempt to gain an area for themselves under cover of statements from their Holy Book, that that part of earth had been promised to them in their Holy Book. There were soon mob attacks on Muslim populations and this started a series of fights ultimately leading to a situation that could be called a civil war.
          In 1947, the British announced that they would soon be ending their Palestinian mandate as the things were going out of control and no agreement could be made between the Jews and the Arabs.  The newly formed United Nations presented a partition plan for this region, on 29 November 1947, which was named as Partition Plan for Palestine (United Nations General Assembly Resolution 181). According to this plan, there were two states to be formed; Palestine and Israel. Israel was to be formed on the Palestinian territories occupied by the Jewish minority of the region and Jerusalem was to be made a city under the control of United Nations.  As could be expected, the Arab League and Palestinians refused to accept this plan as it was compromising nearly all the rights and major part of Palestinian land. The Jews were delighted and accepted the plan as it was favoring them completely.
          The British mandate was to end on 15th of May, 1948. On 14th of May, 1948, the Jewish Agency declared independence and vowed to start an armed struggle and snatch the lands from the locals. As a result, Egypt, Syria, Iraq, Lebanon and Yemen launched a joint Arab League war to defend the Palestinian territories. The Israelis were armed and supported by the allies and so were well equipped as compared to Arab League Force. After a very fierce fighting, for over a year, a cease fire was reached. Temporary borders were setup and given the name Green Line.  According to this cease fire treaty, West Bank and Jerusalem (East) were given in control of Jordan and Gaza Strip was taken over by the Egyptian Authorities. Both the Palestinians and Jews suffered heavy losses of life and major economic crises. Millions of Palestinians were displaced. However the leaders of Jewish Population declared the occupied territories as their “Holy land” and made it clear to the Muslim neighbors that they would say there and Israel is a reality. None of the Arab world countries accepted Israel, as it was a country without any legitimacy.
The War in 1967
          The Green Line, the Israeli occupation and false propaganda against its neighboring countries led to worsening of ties with the neighboring states. In 1967, the Egyptian Army expelled United Nations forces from the Egyptian lands of Sinnai peninsula.  Egypt, Jordan and Syria started to mobilize their forces as Israel continued to threat. On 5th of June, 1967, Israel launched an attack on Jordan, Egypt and Syria. Backed by the US, UK and other western powers, tiny Israeli army defeated the forces of Egypt, Syria and Jordan and after a fight of 6 days, the Arab armies surrendered.  Israel captured Jerusalem and West Bank from Jordan, Gaza Strip from Egypt and also the Golan Heights.
In this way, most of the Palestinian land fell to the Jews who till now occupy and maintain a firm occupation in the region.
How The Occupation of Palestine is Illegal:
          Bringing an end to the Israeli occupation of Palestinian land is as much a prerequisite for peace in the Middle East as is the Palestinian recognition of Israel. The Israeli occupation is not only inhuman and the cause of extreme suffering for the 3.5 million Palestinians living under its subjugation, but it is also illegal under international law. Attempts to claim otherwise have no legal validity and are morally bankrupt and politically dangerous since they basically preclude the achievement of peace.
          While it is true that victorious powers can legally occupy hostile territories seized in the course of conflict – an example of which is the Allies’ occupation of the territory of Nazi Germany during World War II, foreign occupation should nevertheless be a temporary situation, pending a political settlement or solution. During the interim, the occupying Power must comply with relevant instruments of international humanitarian law with regard to its conduct in the territory it has occupied.
          International law is very clear on two basic principles: the inadmissibility of the acquisition of  territory  by  war  and  the  prohibition  of  the  transfer  of  civilians of  the occupying Power to the occupied territory. Both are intended to prevent expansionism and the colonization of occupied territories. Both complement another explicit principle of international law, namely the right of peoples to self-determination, a right that a colonial or occupying Power is obliged to respect.
The Israeli occupation has clearly violated all three of these principles of international law. In fact, throughout its prolonged occupation, Israel has persistently and aggressively breached international law.
          Thus, what makes the Israeli occupation of Palestinian land illegal is not the fact that it occurred during the war of 1967 (regardless of the narrative concerning the causes of the war). What makes the Israeli occupation illegal is that it has existed for 35 years, during which time it transformed into a form of colonialism and suppressed and oppressed an entire people for decades, preventing them from the exercise of their right to self-determination and the establishment of their State, Palestine.
Israel, as an occupying Power, has undertaken countless measures attempting to change the legal status, demographic composition and character of the territory by confiscating land, exploiting natural resources, building more than 250 settlements, transferring more than 400,000 Israelis to the occupied territories, establishing a dual system of law and even annexing part of the territory.
These actions have been carried out in direct contravention of the Fourth Geneva Convention relative to the Protection of Civilian Persons in Time of War, which, among other things, defines the rules of conduct and the obligations of the occupying Power. Clearly then, the active intent of the Israeli occupation has been to negate Palestinian rights, to create new facts on the ground and to illegally expand Israel’s borders.
          Security Council resolution 242 (1967), which is the bedrock of the peace process and of any future peace settlement, is anchored in the principle of the inadmissibility of the acquisition of territory by war. The old and deceptive argument that the resolution calls for withdrawal from ‘territories’ and not ‘the territories’ not withstanding (in fact, the French text of the resolution does contain the article ‘the’). The call in the resolution for the withdrawal of Israel can only be read within the context of the above-mentioned principle.
          Since the onset of the Israeli occupation in 1967, and in response to established, illegal policies and practices of the occupying Power, the Security Council has adopted 26 resolutions that affirmed the applicability of the Fourth Geneva Convention to the territories occupied by Israel. Of those resolutions, several deal directly with the issue of Israeli settlements and several also specifically deal with Israeli violations in Occupied East Jerusalem.
          The resolutions clearly address the illegality of Israel’s policies and practices with regard to both issues. For example, some of the resolutions affirm that the Israeli settlements ‘have no legal validity’; call upon the government and people of Israel ‘to dismantle the existing settlements’; and call upon ‘all States not to provide Israel with any assistance to be used specifically in connection with settlements in the occupied territories’.
          As for Occupied East Jerusalem, which the Israeli government illegally annexed in 1980, the Security Council, in resolution 478 (1980), determined ‘that all legislative and administrative measures and actions taken by Israel, the occupying Power, which have altered or purport to alter the character and status of the Holy City of Jerusalem, and, in particular, the recent “basic law” on Jerusalem are null and void and must be rescinded forthwith’.
          Similar affirmations were made by the Council in several other resolutions. Moreover, the General Assembly and other UN organs have adopted scores of resolutions on the illegal policies and practices of the Israeli occupation and on the legitimacy of, and the necessity for, the exercise of the right to self-determination by the Palestinian people.
          There has therefore been absolutely no impropriety on the part of the UN Secretary-General concerning his recent statements with regard to the Israeli occupation. Kofi Annan’s call for an end to ‘the illegal occupation’ was not only legally correct but was also not a concept invented by the Secretary-General, as reflected in the numerous resolutions of the United Nations. It was, however, important for Mr. Kofi Annan to add his moral authority to the urgent need for an end to that illegal occupation, particularly during this late stage in the perilous deterioration of the situation.
In that statement on 12 March 2002, the Secretary-General addressed both the Palestinian and Israeli sides. The Palestinian side probably did not like everything it heard. But, taken in its entirety, the statement was widely viewed as a necessary and responsible call that intended to, and should, help the parties to move forward towards a peaceful settlement. For this to happen, the Israeli people and the Israeli government must indeed come to terms, for once and for all, with the illegality of their occupation and the need for its termination.

The first map is Israel as it was first created by UN declaration in 1947. The blue portion is Israel; the rest is all Arab lands. Note that Jerusalem was completely within Arab lands and Israel was much smaller than it is today. Note also that there is NO Israeli presence inside the area surrounding Jerusalem. No settlements, certainly no IDF. 
The red square outlines the approximate region shown below.

 The second map shows Israel as it is today. Note that the western border of Palestine has been pushed up to Jerusalem. Such a land grab is NOT the result of a defensive act, but of an invasion to bring Jerusalem under Israeli control, even though Jerusalem was not originally part of Israel. The maps clearly tell the story of an Israel conquering lands which do not belong to it. Since Sharon took office, Israel has built more illegal Jewish Settlements on Palestinian land. Note on the above map that the majority of the lands which were originally Arab lands when Israel was created, are now under complete (dark blue) or partial (green) Israeli control. Only the black areas remain to the Palestinians, and those are shrinking by the minute. 

The Loss of Palestinian Lands from 1946-2000; The maps tell it all! : 

          How does a defensive action result in the total conquest of the lands of others? The answer is that it does not. Israel is the aggressor. The maps of Israel then and now prove it.
Syndicated from: The Absolute Verdict

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Is Latin America Confident for All the Wrong Reasons?

Posted on 30 January 2012 by Tea Server

Guillermo Ortiz

Latin America’s technocrats spent the second half of 2011 on mushy footing, unsure what effect the euro zone crisis might have on the region and afraid that China might experience a “hard landing.”

Now some of the region’s wonks are expressing more confidence. “Latin America has never been better equipped to move forward,” said Guillermo Ortiz, a former central banker of Mexico, at Davos. He went on: “This is really the decade for Latin America.”

Two points: First, now it is the Mexicans who are cooing over growth and international clout, not the Brazilians. Fair enough. Brazil’s economy braked fast last year, recording nil growth in the third quarter, while Mexico did an impressive head fake by experiencing a growth spurt just as the region below went into slow-mo.

Second, whatever confidence leaders have recovered since last summer is premature. In his remarks, Ortiz suggested that the region had moved beyond the headwind of Europe’s crisis, and structural adjustments over the past decade ensure that Latin America will be sitting pretty to 2020.

Maybe this will be case for Mexico, which relies more on US consumers rather than European ones. But while forecast growth of 3.5 percent for Latin America in 2012 surpasses Mexico’s trend rate, elsewhere it signals a dangerous slowdown. Inflation will be higher than economic growth across most of South America; in turn, slower growth will increase unemployment, feeding informal sectors that already threaten socioeconomic development. Lower commodity prices could metastasize the bad news.

By now, anyone who’s been watching Latin America is well aware of the red flags raised over the region’s reliance on commodities for economic growth, so I’ll review by way of hyperlink and move on.

What troubles me are recent signs of Latin America’s inability to harvest commodities. A week ago a UN report concluded that a drought in northern Argentina means the world’s second-largest corn exporter will ship about 1.6 million tons of corn less this year than in 2011. A clear-cut case of nature’s wrath no doubt, but it shouldn’t be dismissed given the context of underproduction elsewhere.

Brazil produces over half of the world’s ethanol; the country’s cane-based brew is to biofuel what the bikini is to fashion. Last year though, Brazil was forced to import 1.1 billion liters of ethanol. And Mexico, which counts oil as its second-largest source of tax revenue and sits atop the world’s fourth-largest shale reserves, is importing record levels of natural gas.

Here’s the kicker: the United States is taking up the slack. Despite Argentina’s weak harvest, corn prices are expected to decrease this year because of strong exports from the US. Nearly all of Brazil’s ethanol imports last year came from the USA, as did most of Mexico’s imported natural gas.

Brazil and Mexico are in this situation because of inept government policy. Mexico’s Pemex has said it plans to operate 175 shale gas sites by 2015; to date, it is drilling at one site in the northern state of Coahuila.

Meanwhile, Brazil’s government has dis-incentivized ethanol production in recent years by capping domestic prices and by cutting taxes on oil–but not ethanol– production. The result? Brazil had some 150 million tons of spare mill capacity for ethanol production last year.

Just back from the Davos shindig, Moises Naim chided big talking officials from developing nations for their hubris. Poor management of hallmark commodities in Latin America leads me to agree.

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President Ali Abdullah Saleh and Mohamed Reza Shah of Iran, Historic Parallels

Posted on 29 January 2012 by Tea Server

Until the Arab spring movement and its legion of revolutionaries came to clash with President Ali Abdullah Saleh’s regime, demanding an end to decades of autocracy and repression, the Americans considered Yemen’s autocrat a “bulwark” against terrorism, a strategic ally in the region in the fight against al-Qaeda, the well-known Islamic organization.
When it became clear that Yemenis were determined to depose the aging dictator, no matter the amount of blood his armed forces were willing to shed, the White House started to shift its rhetoric, calling for reforms and a transition to more “democratic institutions.”

The “beautiful friendship” which united the 2 countries started to melt away at the pyre of people’s anger, threatening to damage America’s foothold in the region.
Although many democracy militants have accused the United States of America of siding with dictators for it served their middle-eastern policies, accusing them of protecting and in the case of President Saleh harboring war criminals; one could wonder whether America is not playing a much sinister game of plots and betrayals.
One does not need to go back to far up in the history book to remember another well-known autocrat whose friendship was discarded when he failed to fulfill his purpose. Mohamed Reza Shah of Iran was abandoned by his “American friends” and almost sold back to the Ayatollahs when he failed to live up to the White House foreign policies’ expectations.
Could the Obama’s administration turn against Saleh and hand him over to those who are clamoring for his arrest? Could Yemen’s infamous statesman become the new Shah of Iran in his desperate search for political asylum?
One cannot draw away from the remarkable symmetry in between the two deposed leaders. One ran away for his allegiance to the West angered his people so that he feared they would execute him, another was forced to relinquish the power America’s helped him to master for 3 decades. Both turned to the United States and were denied entry, both insisted, both were eventually allowed.
One was betrayed, one is awaiting his fate.

Mohamed Reza Shah of Iran

The very countries which are claiming to be promoting Democracy and Freedom across the Globe, saying that they will always side with those who seek to emulate western standards, are the very ones who crushed the little hope Iran had at becoming a successful democratic state.
Because Iran’s emancipation stood in the way of their economic interests, the United States and Britain decided to assert the Shah’s absolute power over his people.
When Mohamed Mosadeqq, the founder and leader of the National Front of Iran was elected Prime Minister by the Parliament, he immediately announced the nationalization of Iran Oil industry, shutting out the immensely lucrative Anglo-Iranian Oil Company, which at the time was one of Britain main economic pillars.
The British then convinced the Americans of the need to overthrow Mosadeqq and re-establish the Shah of Iran as the only authority in the country, arguing that the move would serve both nations interest in the region.
Iran strategic geo-political position and its vast Oil reserves represented too much of an asset for western hegemony to let something such as democracy get in the way.

After a “coup d’état” known as the “operation Ajax” failed, the Shah was pressured into issuing a decree stating Mosadeqq’s demotion. Subsequently the Shah fled to Iraq, then Italy for he feared for his life. He later came back under the protection of his allies.
2 decades later, the Shah was ousted by his people as his attempts to westernize and secularize Iran had anger the people and the political class to such an extent that they sought his execution.
In exile and ill with cancer the monarch turned to the United States of America for safety only to be denied asylum. After he insisted for he said he needed urgent medical treatment, the Pentagon agreed to allow him in for a limited period of time. It turned out that the visit of the Royal coincided with an attack against the American Embassy in Tehran and the kidnapping of some 400 American nationals.
Caught in the middle of much controversy, shun away by his former friends, a terminally ill Shah sought refuge in Latin America to finally come to die in Egypt where he is buried.

Ali Abdullah Saleh

In the wake of the attack on American soil by al-Qaeda in 2001, President Saleh realized that if he had any chance of surviving the military wave which was threatening to come his way he had to quickly seal an alliance with the Western giant.
The Yemeni-American fight against terrorism was born.
And if Saleh manipulated his new “friends” by playing up their fear in exchange for financial support the alliance cost him dearly on the political front.
As Drones attacks became more frequent and civilian casualties mounted, Yemenis started to speak of treason, accusing the autocrat of allowing foreign forces to enter Yemen air space in exchange for cash.
The seeds of revolt were planted.

And although it took Yemen nearly 2 decades to finally mobilize the needed momentum to rise up against the state apparatus, Saleh’s opponents proved impossible to stop.
Having witnessed first-hand the power of the people in Egypt, the White House decided to operate differently in Yemen, preferring to prepare the autocrat’s exit according to a specific set of terms rather than let the mob overtake the presidential palace and potentially ruin any hope of further cooperation on the al-Qaeda front.

But if Saleh successfully secured his political and financial safety as well as that of his extended family, his troubles might not be over yet.
Just as Yemen is preparing to welcome a new president, Saleh who was victim of a bomb attack in 2011 at the very heart of his presidential compound has since been suffering from ill-health, requiring extensive medical attention.
As the Shah did before him, Saleh asked to be allowed to travel to the United States to undergo some much needed medical treatment, only to be refused. Following weeks of intense negotiations and much political controversy, the White House finally agreed to allow Saleh in, providing that his visit be brief and strictly confined to the hospital.

And as the Shah before him, his countrymen are already gathering, demanding that he’d be deported to the International Criminal Court of Justice for crimes against humanity and his assets frozen for having pillage Yemen’s riches.
Only weeks after Yemen’s parliament granted him immunity, Saleh runs the risk, like the Shah did, of being sold out to his opponents for he no longer serves his purpose and has become somewhat of a liability. And since United Nations, Secretary General Ban Ki Moon declared that no immunity would stand in a court of law when it came to war crimes and gross violations to human rights, the White House could in all good conscience leave the autocrat to suffer the fate he deserves.

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Unsafe Abortions on the Rise

Posted on 28 January 2012 by Tea Server

Photo by EuroWeb

The right to life is unquestionably one of the biggest human rights debates in the United States. Some argue there is never an acceptable reason for the termination of a pregnancy, others will allow it in the case of a medical emergency or to save the life of the mother, some are for the use of only early term abortion, others argue that it is simply the mother’s choice.  The recent March for Life in DC this month is only one manifestation of this debate, which has been a major battle amongst individuals and parties since the historic Roe vs. Wade decision. However, the U.S. is not the only country where the issue of abortion is controversial.

Many developing countries are losing the battle against harmful and illegal abortion practices that significantly impact female health and family planning.  The practice of unsafe abortions is one of the leading contributors to maternal death worldwide.  These practices are often conducted outside hospitals or clinics, or lack qualified or any real medical supervision. Women who undergo unsafe abortions are prone to dangerous infection or bleeding, many of these women then go untreated due to both fear or shame and a lack of access to adequate healthcare.

Recently, a new study entitled, Induced abortion: incidence and trends worldwide from 1995 to 2000, was released by the New York Guttmacher Institute.  The study found that the number of women having induced abortions has remained high since their 2003 report, which had shown an initial reduction in induced abortions.  The report stated that while abortion rates had fallen from 1995 levels, they have now leveled off. The rise in world population is only a partial explanation for 2.2 million more abortions in 2008 compared to 2003.

“The declining abortion trend we had seen globally has stalled, and we are also seeing a growing proportion of abortions occurring in developing countries, where the procedure is often clandestine and unsafe. This is cause for concern,” says Gilda Sedgh , lead author of the study and a senior researcher at the Guttmacher Institute. “This plateau coincides with a slowdown in contraceptive uptake. Without greater investment in quality family planning services, we can expect this trend to persist.”

According to the World Health Organization (WHO), complications from unsafe or illegal abortions  were the cause for an estimated 13% of all maternal deaths worldwide in 2008; almost all of these deaths occurred in developing countries. Globally, unsafe abortion accounted for 220 deaths per 100,000 procedures in 2008, 350 times the rate associated with legal induced abortions in the United States (0.6 per 100,000). Unsafe abortion is also a significant cause of ill-health. Each year approximately 8.5 million women in developing countries experience abortion complications serious enough to require medical attention, and three million of them do not receive the needed care.

The study also found that that laws restricting abortion were not not tied to lower abortion rates. In areas where abortion is heavily restricted, rates of the practice were actually higher.  The 2008 abortion rate in Africa was 29 per 1,000 women of childbearing age and in South America it was 32 per 1,000; while in Western Europe, where abortion is permitted by law, the rate was only 12 per 1,000.

 ”These latest figures are deeply disturbing. The progress made in the 1990s is now in reverse. Promoting and implementing policies to reduce the number of abortions is now an urgent priority for all countries and for global health agencies, such as WHO,” says Richard Horton, editor of The Lancet. “Condemning, stigmatizing, and criminalizing abortion are cruel and failed strategies. It’s time for a public health approach that emphasizes reducing harm – and that means more liberal abortion laws.”

The difference in rates has prompted many in the field to advocate for looser abortion laws on a global scale. However, others argue that better family planning programs, including education and increased access to birth-control, are they key to the problem.  As noted in the post, Leaders meet to put family planning on the global agenda, their are 215 million women worldwide without access to family planning, a staggering number that will only increase as the global population continues to rise.  Therefore, the issue of female health and family planning must become an international priority if there is to be a decline in maternal deaths.

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FPA Comments On: “Mexico’s Drug War: Not Another Colombia”

Posted on 20 January 2012 by Tea Server

This week COHA.org writer Natalia Cote-Munoz produced a great piece comparing and contrasting Mexico’s current drug war with Colombia’s historical drug conflict in order to differentiate between policies that should be applied to the two countries. Often parallels are depended upon in discussing the two countries and their internal drug conflicts, but with a lack of clear analysis on each individual case, solutions for Colombia are assumed to apply neatly to Mexico as well. This is done to such a great degree that policy is formed that treat Colombia’s past drug violence the same as Mexico’s current drug conflict. Natalia Cote-Munoz seeks to draw clear distinctions between the two conflicts in order to initiate a proper policy debate that can create effective solutions in Mexico, and maintain successes in the case of Colombia. I recommend everyone read the COHA piece Mexico’s Drug War: Not Another Colombia at the link here.

Parallels between Mexico’s and Colombia’s drug violence is often compared as it involves two simple elements, namely violence coming from the narcotic trade and extreme violence that affects society as a whole. The article argues that there are many differences between the two countries and the drug issues beyond extreme violence. She makes a very important point as an analysis of extreme violence could also link Mexico to Iraq or Afghanistan a few years ago as much as it could be linked to Colombia in the 80s and 90s. The article points out that the structural elements of corruption and a lack of justice in Mexico differs than that in Colombia, although it exists in each country and contributes to the drug trade. Poverty, while not the reason for a drug trade, enables the movement of many in society to take risks to gain immediate rewards. With a lack of confidence in the system and the government, it creates rationale actors in an environment where money and the narcotics market has a real impact on society as a whole.

Natalia points out correctly that the complex system making true O’Donnellian democracy difficult in Mexico even today was not as much of a challenge faced in Colombia. Historically Colombia was blessed with relatively functional institutions and a traditionally democratically motivated system to help manage drug violence that arose over thirty years ago. Whereas Mexico’s complex democracy and systemic difficulties contribute to the difficulties in forming and anti-narcotics strategy, Colombia’s drug violence was linked to past revolutionary movements that existed in a past era that were married to drug cartels in the 1970s. The way cartels were formed is also highlighted by Natalia, where Colombian cartels often were run by well know figureheads, Mexican cartels reflected our networked society, working off networks that often are not understood nor do officials know who exactly runs the drug gangs. While Colombia could target the FARC, and affect the drug cartels in the process, Mexican gangs are comprised of many smaller, unknown elements that can evade authorities by way of being covert. This allows Mexico’s smaller gangs to have the ability to cross borders, maintaining lucrative markets by establishing them from Vina del Mar to Vancouver or displacing defunct cartels that are stopped by authorities or eliminated by competitors. These broad networks also create access to weapons that can be easily obtained in the US for use against Mexican authorities in Mexico.

Suggestions by the author that the demand for narcotics in the US and weapons proliferation across the border is a main source for the cartel violence in Mexico is tied to the ease of access Mexico has to the US border. While she makes a solid point that a lot of the problems can be sourced in the US demand for narcotics, it is not likely that the US would legalise narcotics or even take Mexican cartels as serious as Iraq, even though they are a greater burden on American society than any country in the Middle East. President Obama for all the criticisms has made a lot of strides in US foreign policy, just not in Latin America yet, hopefully the COHA.org article will reach those policymakers in Obama’s Administration for positive policy development.

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News…

Posted on 14 January 2012 by Tea Server

“Alarming malnutrition” in Sudan conflict zones: UN
Malnutrition is stalking civilian populations in conflict zones inside the Sudan and Sudanese authorities should end restrictions on United Nations’ staff ability to travel to the affected areas, says UN Undersecretary-General for Humanitarian Affairs Valerie Amos. Clashes between Sudanese security forces and rebels that erupted in June have forced about 417,000 people from their homes.

Case of tortured child bride shocks Afghanistan
Afghans have reacted in shock and dismay to the case of a 15-year-old child bride brutally tortured by her husband and his family in a bid to force the youngster into a life of prostitution. The outcry has raised questions on women’s rights progress more than a decade after the end of the Taliban’s rule and prompted Afghan President Hamid Karzai to form an investigative committee.

First domestic abuse hotline in Pakistan assisting women
The first helpline for Pakistani women seeking assistance for domestic violence has been opened by the charity Madadgar, or The Helper, in Karachi, the country’s largest city. More than two-thirds of women in Pakistan suffer some form of abuse at the hands of family members, according to this report.

Robinson, Tutu lead charge against child marriage
Former Irish President Mary Robinson and Archbishop Desmond Tutu are spearheading an initiative on behalf of The Elders to raise awareness around child marriage and the damage the practice causes to 10 million young girls every year. Girls Not Brides aims to mobilize people around the world to support an end to marriages under the age of 18 and protect the basic rights of young females.

Pakistan: Poverty is cited for rise in infanticide
The number of babies abandoned by parents on Pakistan’s streets to die is on the rise, and girls make up the overwhelming majority of the infants, according to local NGO Edhi Foundation. Increasing food prices and grinding poverty are the main causes cited for the upswing in infanticide.

Sex-selective abortions still common in India
A mechanical device that allows authorities to track sonograms and monitor doctors’ abortion decisions is drawing fire from Indian activists as failing to be a solution to gender-selective abortions. Research shows that India has lost 12 million females to selective abortions in the last three decades.

India’s efforts to cut sex selection may be paying off
By and large, growing wealth has only resulted in greater use of sex-selective abortions in the two largest countries on earth, India and China, as well as other countries across Asia. But research shows India might have turned a corner.

Family sizes changing across Latin America
Fertility rates are dropping across Latin America as modern financial realities, improved health care and mass migrations to urban centers have resulted in women exerting more control over family planning. The average fertility rate across the region has dropped from 6 in 1960 to 2.3 in 2010.

Gender equity gains ground worldwide
Gender equality in four key areas — education, health, workforce and rights — is improving across the world, according to a new report from the World Bank. In the last two decades, dozens of countries in Africa and Latin America have passed legislation protecting women’s civil and political rights, and Saudi Arabia is now the only country in the world that maintains restrictions on women voting.

Rise in assaults on Somali women, girls
Aid workers and UN officials are reporting an alarming increase in incidences of rape and sexual abuse against women and girls in southern Somalia, primarily at the hands of the militant group al-Shabab. But the displacement of thousands of women as a result of famine has made them vulnerable to attacks by other men, too, especially in lawless refugee camps where they are preyed upon by rogue militiamen and even government soldiers.

 

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The Future of Latin American Relations with Iran

Posted on 13 January 2012 by Tea Server

This week Iranian President Ahmadinejad toured Nicaragua, Cuba, Ecuador and Venezuela in a push to expand Iran’s international relationships as well as to establish Iran in America’s backyard. With recent tensions being ramped up exponentially between the US and Iran, world focus on any actions made by Iran receives a fair amount of attention. There are many theories on how Iran can benefit from an extended relationship in Latin America, but the clear absence of a visit to Brazil on this trip reflects the limitations of a Latin America saddled with Iranian interests. After Turkey’s and Brazil’s attempt to deflate tensions in the region regarding Iran’s nuclear program nearly two years ago, a strong relationship with Latin America as a whole may not be in the cards for Mr. Ahmadinejad.

The absence of a visit to Brazil shows a clear move by Brazil to avoid tying itself further to Iran. There are reasons of economic ties to the US as well as the lack of benefits Brazil has in slowing its economy and relations with the rest of the world for the sake of Iran and its nuclear ambitions. Brazil as the world’s top ethanol producer also places Brazil at odds with Iran and its oil, especially since Brazil is a seller of oil itself and has no benefits linking itself to a foreign power that would likely enter into a hot conflict with many of Brazil’s future customers. A middle position allows Brazil to mediate and promote its exports globally as well as in the Middle East and Iran.

Some argue that Iran in Venezuela and Cuba is not so much of a move from Iran to pursue economic and political ties close to the United States, but is a failure of the last few administrations to take advantage of changes in those countries; recently a physically weak Chavez and the opening of the Cuban market. The United States’ lack of initiative in Latin America has allowed for an opening in America’s backyard and has created a signal to foreign commercial interests from China, Russia, Europe and Iran to come into the region and establish them in a region that was always considered a main source of commercial ties for the United States. Iran creating closer ties in the region goes beyond commercial interests as seen by many analysts on Latin America and Iran. Iran’s links to past attacks in the region as well as moves by the Iranian government to establish its military intelligence in Latin America may be a move to counterbalance US actions in the Middle East. While the actual abilities for Iran to strike the US from Latin America or hurt the US inside of the region may be limited, the presence of Iranian agents in America’s backyard may do its job in striking fear into American’s daily lives by inciting a new type of missile crisis into the minds of Americans.

While Latin America has welcomed Iran to some degree in the region, it should be noted that intentions to assault the United States or become part of the Axis powers in a war with Iran and the West is likely not in the cards for any country in Latin America. Latin American countries benefit little from a strong relationship with Iran and often try to maintain its economic ties while still being able to dent the United States’ reputation. While it is clear that historically the US has not been the best hegemony for many Latin American states, there is a limit to how far countries like Cuba and Venezuela will go in poking at the US for the sake of Iran. Regarding a US hegemony in the Middle East, critics of US actions in Iraq and Afghanistan often do not lodge the same criticisms with possible future actions taken against Iran, and blocking the Strait of Hormuz and 40% of the world’s oil exports is likely the line for many. With a strong and battered opposition in Iran’s massive youth population and Iran’s government balancing political legitimacy with internal challenges in its own government, a hot conflict with Iran may fracture its society and send its allies running from the fallout, possibly that of a nuclear conflict. Latin Americans will surely take care of themselves first and avoid tying themselves to conflicts in the Middle East that have no end and no solutions. It is up to the United States to create an ease of amicable ties beyond Mexico, Brazil, Argentina and Colombia that will close the gap in Latin America.

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Mexico: Rumbo a la elección

Posted on 09 January 2012 by Tea Server

http://www.campeche.com.mx/noticias/nacional/pan-y-pri-marcan-ruta-del-2012/6942

Mexico’s presidential election, to be held July 1, looks like a foregone conclusion. President Felipe Calderón’s right-wing National Action Party (PAN) has fallen far out of favor due to Mexico’s terrible drug violence. In the past 5 years, the drug wars have killed over 45,000 people. The Northern border city of Ciudad Juarez had 300 murders in 2007; in 2010, the figure was 3,622, giving this place the highest murder rate in the world. As Mr. Calderón’s critics like to point out, Juarez’s murder rate is higher than anywhere in Iraq or Afghanistan. With the PAN’s national security policy in disarray, Enrique Peña Nieto of the rival Institutional Revolutionary Party (PRI) led a recent presidential poll by 25%. Seeing these numbers reminds me of last time around in 2005, when President Calderón and the PAN trailed but went on to win the election, and wondering if the upcoming result will be as everyone expects.[1][2]

Is it truly unthinkable that the PAN could win again? Polling evidence says it is indeed unthinkable. Mitofksy’s November 2011 poll of voter preferences gave 44.6% to Peña Nieto (EPN), 19.7% to the PAN’s Josefina Vázquez Mota (JVM), and 16.1% to Andres Manuel López Obrador of the left-wing Party of the Democratic Revolution (PRD). PAN optimists observe that at the same point before the 2006 election, Mr. Calderón was third place in the polls before coming back to win. The difference is that the PAN’s current deficit is much higher at 25%, versus the 5% deficit Mr. Calderón faced in November 2005. However, not all commentators agree that a PRI victory is inevitable. I will discuss three reasons the PAN has a shot: EPN’s recent campaign gaffes, Mexico’s growing economy, and the Vázquez Mota factor.

Enrique Peña Nieto, the PRI’s man in 2012, is photogenic, well-known, and liked. At age 45, he has already served 6 years as Governor of Mexico State, the country’s most populous. While his image is attractive, some are questioning his ability to relate to ordinary Mexicans. At the 2011 Guadalajara International Book Fair, EPN was asked to name three books that had influenced his life. He struggled with the answer in an awkward speech eerily similar to Sarah Palin’s inability to name her own preferred newspapers.[3] In another gaffe, EPN was unable to state the price of the tortilla, a staple food in Mexico. EPN explained that he was not “the lady of the house.”[4] While these are hardly political killers, it is unimaginable that the President of Mexico could not know the price of a tortilla. EPN’s party has also suffered from disgrace at the leadership level. On December 2, PRI President Humberto Moreira resigned due to a debt accounting scandal in Coahuila State, where Moreira had been Governor. The PRI led Mexico for 71 years until 2000, and its detractors call it a bastion of corruption. The Moreira scandal provides more ammunition.

Another concrete issue where the PAN can directly challenge the PRI is Mexico’s economic progress. Duncan Wood of the Center for Strategic and International Studies writes “it is undeniable that successive PANista governments have been successful in…preparing the way for long-term prosperity.”[5] According to data from the IMF and government sources, real GDP grew 5.4% in 2010 and about 3.8% in 2011, after falling 6.2% during the 2009 recession. On January 3, the Mexican Government sold $2 billion in 10-year bonds at lowest-ever coupon and yield rates. This means that the bonds pay lower interest rates than past issues, and that investors demanded a very small discount when buying them. There has also been progress on unemployment, which soared up to 6.41% in September 2009, but had declined to 4.97% in November 2011 (Source: INEGI). Inflation will be a challenge due to the recent depreciation of the peso, which declined in value from 11.5 per dollar in May to around 13.7 per dollar currently. However, analysts are confident that the Central Bank has both the reserves and the strategy to stabilize the peso. Mexico is also expected to run a negative trade balance of around $4 billion and a current account deficit of $7 billion for 2011. However, the current account deficit will be easily offset by foreign direct investment, projected at around $20 billion annually for the next couple of years. The PAN can use its record to show that it is best poised to help the economy take next steps. These include liberalizing the labor market, widening the tax base, and incentivizing private companies to invest in state-owned oil producer PEMEX. The latter reform is necessary because PEMEX’s refining capacity has lagged domestic demand, forcing the government to subsidize imported gasoline. This reform is also controversial, as PEMEX’s unionized workers are extremely opposed.

The third factor that should keep EPN up at night is the woman to whom The Economist attributes “a flash in the PAN.” Josefina Vázquez Mota, most recently PAN leader in the Chamber of Deputies, served as Education Minister under President Calderón (2006-2009) and Minister of Social Development under President Fox (2000-2005). She is now in the driver seat to become the PAN’s candidate for the highest office. The popularity of JVM’s party has waned – public opinion of the PAN was 27% favorable and 30% unfavorable in November according to Mitofsky. However, she has solid anti-establishment credentials. As Education Minister she argued with the head of Mexico’s powerful teachers’ union, Elba Esther Gordillo, a political ally of President Calderón. Calderón has also endorsed a competitor, former Finance Minister Ernesto Cordero, to be the PAN’s nominee.[6]

Separation from Calderón has not hurt JVM within the party where 52% of members prefer her to be the nominee as of November, up from 38% in August. She is also making strides with the public at large: in the 3 months from August to November, the percentage of the public that recognizes JVM increased from 56.4% to 67.4%. In the same period her share of preference in a head-to-head contest with EPN and López Obrador (AMLO) increased 3%. JVM’s campaign may have more potential to win supporters through advertising than her competitors, who are both known by over 90% of the public. The PAN’s official primary in February will give her a boost through media exposure. Her key issues, strengthening education quality and the justice system, will be used to accuse the PRI of failing to develop Mexican institutions during the PRI’s long period in power. JVM may be the breath of fresh air the PAN needs, and the PRI should be concerned: its polling lead over the PAN has declined from a gargantuan 42% in November 2010, to a less gargantuan 25% one year later.

 


[1] Rosenberg, Mica and Julian Cardona. “Federal Forces sully Mexico’s war on drugs.” Reuters. December 27, 2011.

[2] Consulta Mitofsky. “Así Van…México: Rumbo AL 2012.” November 2011.

[3] http://www.economist.com/blogs/prospero/2011/12/politicians-and-books

[4] http://www.economist.com/blogs/americasview/2011/12/mexican-politics

[5] Wood, Duncan. “Mexico 2012: Tracking Democracy in a Time of Uncertainty.” Center for Strategic and International Studies, May 2011.

[6] http://www.economist.com/node/21526362

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Can Latin America handle another global shock?

Posted on 02 January 2012 by Tea Server

Latin America's insertion into the global economy. Source: Google Images

A decoupling of emerging markets from the struggling developed world is a myth, as we saw in 2011 when euro and US shocks caused a sell-off in EM currencies, including in Latin America. Next year could be rough as global growth slows. Countries from Brazil to China are rushing to reverse their earlier policy tightening. Softening Chinese demand should result in flat to softer commodity prices, affecting most countries in Latin America. The big wild card for growth will be the euro zone again. On this, it is challenging to be optimistic. Latin Americans borrow substantially from European banks, and so access to capital may be muted.

So, which countries in Latin America are best able to weather what’s coming in 2012? Countries with strong external balance sheets, macro policy flexibility, sizable domestic markets, and stable politics. Brazil generally passes this test, but its ongoing slide into stagflation — inflation above target and growth below 3% — suggests some limit to policy flexibility. Watch out for the Venezuelan election because no one knows what a post-Chavez world will look like. Mexico’s seems well-positioned for 2012, given a competitive exchange rate and rising exports, some dynamism north of the border, policy flexibility, and what looks to be a fairly quiet electoral season on the horizon. Yet Mexico is vulnerable to just the sort of developed market crisis that beckons toward year-end 2012: namely, a sell-off in the US dollar that could result from America’s inability to solve its government debt problem.

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